Quebec Separatist Finance Minister Is Demoted

At the end of a week in which he narrowly lost the Quebec referendum on sovereignty and announced his own eventual resignation, Quebec Premier Jacques Parizeau demoted his Finance Minister.

In a Cabinet shuffle Friday, Parizeau moved Jean Campeau from the finance portfolio to transport, a significantly less prestigious post.

Quebec separatists were defeated 50.6% to 49.4% in Monday’s referendum on Quebec sovereignty. On Tuesday, Parizeau announced he will resign as premier and Parti Quebecois leader just before Christmas.

Campeau’s demotion came as Quebec’s Parti Quebecois government must take some of its toughest steps yet to reduce its budget deficit and rein in its growing public debt.

In his 13 months as finance minister, Campeau brought down the separatist government’s first budget, which outlined a plan to eliminate its operating budget deficit by 1997-98.

But analysts say the next budget, which is expected to be brought down in March by Campeau’s successor, Pauline Marois, will have to go much further.

“This is going to be a pivotal document for Quebec’s credit rating,” said Brian Miron, senior analyst at Dominion Bond Rating Service.

In his budget speech last May, Campeau forecast a 1995-96 budget deficit of $2.97 billion. By then, Quebec’s total debt will total $55 billion, or 45% of the province’s gross domestic product.

Although figures by Quebec’s finance department for the first quarter of the fiscal year showed that it is on track to meet Campeau’s deficit target, analysts said they are waiting to see if second-quarter numbers expected soon back that up.

In her first budget as Finance Minister, Marois will have to show how the Quebec government plans to cut expenditures and raise revenues in an effort to balance the overall budget sooner rather than later.

At a news conference in Quebec City on Friday, neither Parizeau nor Campeau would comment on whether Campeau was demoted or asked to leave the finance post.